Australia's Fairfax Media, which publishes the Sydney Morning Herald, announced that it will cut 1,900 jobs over the next three years in an effort to keep the company afloat amid falling revenues as the journalism industry increasingly shifts online.

Along with the layoffs, which account for nearly one-fifth of the company's 10,000-member staff, the company will change two of its major daily newspapers, the Herald and the Age, from broadsheets to the cheaper tabloid formats and introduce paywalls for the paper's websites beginning in 2013.

Fairfax will also shutter two printing facilities in Sydney and Melbourne by June 2014 as it divests from traditional print news formats and places more emphasis on developing its digital media and online presence.

The media giant's cost-cutting measures are expected to save Fairfax A$235 million ($237 million) per year by fiscal 2015.

No one should be in any doubt that we are operating in very challenging times, Fairfax Chief Executive Greg Hywood said in a statement.

Readers' behaviors have changed and will not change back. As a result, we are taking decisive actions to fundamentally change the way we do business.

Roughly 65 percent of the Herald and the Age's combined readership now consumes content in a digital format, according to Fairfax.

The evolution of the Sydney Morning Herald and the Age to compact formats and the implementation of digital subscriptions for these mastheads are landmark events for Fairfax, Hywood said.

Our investment in quality journalism and our editorial standards will not be compromised and will continue to underpin our success.

Fairfax's story is a familiar one to major print journalism publications around the world that are struggling to remain profitable in an ever-expanding digital media environment.

All the world's newspaper companies are experimenting with what sustainability looks like, said Margaret Simons, the head of the University of Melbourne's Centre for Advanced Journalism, Reuters reported.

The availability of free content and the migration of readers online has severely cut into the revenues of traditional print news publications and pushed media companies like Fairfax to scale back print operations, increase online presence and reduce staff.

The changes announced today have been selected after considering the merits of a full range of structural alternatives, including a de-merger. The package of strategic initiatives is bold, and several are difficult, particularly as they will impact on some of our people, Hywood said.

However, we believe that they are in the best interests of Fairfax, our shareholders and ultimately the majority of our people.